Underdog to Exit Seven US Fantasy Sports Markets Amid IG Group Takeover

Underdog is set to shut down its fantasy sports business in seven US states, surrendering its licences in those jurisdictions. The company will cease operations in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio, and Pennsylvania.

Jeremy Levine, the Founder and Chief Executive Officer of Underdog, confirmed via the social media platform X that the company’s ‘Drafts’ product would no longer be offered in those states from 10 September.

The withdrawal is a direct result of regulatory determinations in the affected states. Authorities concluded that the simultaneous operation of a predictions platform and traditional fantasy sports is not permissible, forcing Underdog to prioritise one business line. The company, which first entered the prediction market space in September 2025 through a partnership with Crypto.com, has opted to focus on this newer product.

Despite the closures, Underdog’s draft-style fantasy contests will remain operational in 33 other US states and in Canada, with the exception of Ontario.

Strategic Pivot Ahead of IG Group Deal

This strategic shift occurs as Underdog prepares for its acquisition by IG Group, a UK-based FTSE 100 fintech firm. The $1.1bn deal, agreed in late July, will see the firm led by CEO Breon Corcoran absorb a company with a significantly younger user base. Over 60 per cent of Underdog’s monthly active users are under the age of 30, in contrast to IG Group’s average customer age of 42.

The acquisition brings the burgeoning US prediction market sector into sharp focus for the UK. Currently, no prediction markets hold a licence from the Gambling Commission, and the country is in the process of weighing its regulatory stance on such products.

This September, the Financial Conduct Authority (FCA) is scheduled to reassess whether consumers should have broader access to certain investment products, a review which may bring the UK's retail binary options ban back into focus. The evolving regulatory climate is being monitored by established UK operators in related sectors, such as the betting exchange Smarkets, which is led by CEO Jason Trost.

The wider industry is also set to convene on the topic, with the Global Prediction Market Forum scheduled for 1 October in Lisbon. Underdog's decision to pivot away from fantasy sports in key states underscores a complex and shifting regulatory environment in the US. For its incoming parent company, IG Group, it represents a firm commitment to the prediction market model, even as the regulatory pathway for such products in the UK remains undefined.